Cogitations

Wednesday, December 9, 2009

I couldn't resist responding to this article in the New York Post [note: some of the comments are less than civil]. Apparently NYC has removed bicycle lanes from a Hasidic neighborhood because "[s]cantily clad hipster cyclists attracted to the Brooklyn neighborhood made it difficult, the Hasids said, to obey religious laws forbidding them from staring at members of the opposite sex in various states of undress. These riders also were disobeying the traffic laws, they complained." [Photo credit: New York Post]

Pardon me. I was under the impression that there was some sort of prohibition against enacting laws or using public resources for the express purpose of helping specific religious sects. Wait . . . there is. The First Amendment provides that "Congress shall make no law respecting an establishment of religion . . . ." WTF?

To make it worse, the city decided to shit on bicyclists' rights as well. It's dangerous enough to ride in the streets as it is. Bicycle lanes are a necessary response to enable bicycles to share the roads that they, as taxpayers, are fully entitled to use. It's galling that the city would pander to a religious group that apparently can't look the other way when a girl in shorts rides by on a bike. (Also - it's December in New York. Are there really that many girls riding by in shorts?) It's simply enraging that it would remove important safety equipment WHILE catering to "an establishment of religion."

Apparently there are some "hipsters," according to the Post, who took it upon themselves to fix the damage that the city wrought. This YouTube video [again with the comments - sheesh] shows the operation. Now, as a soon-to-be-lawyer, I can't condone taking the law into one's hands. But as a citizen and a cyclist, this is just beautiful. Unfortunately, the painters have been arrested. We'll see what happens next.

Michigan Democrat Bart Stupak had an op-ed in yesterday's Times defending his amendment to the House health reform bill (which passed a couple of weeks ago -- a similar amendment was voted down in the Senate, setting up a collision for the conference committee to work out). Stupak's (I keep trying to type Stupid, and I swear it's nothing more than a Freudian slip) defense of his amendment demonstrates that one of two things is true: a) he has no idea how insurance works, and doesn't recognize that his plan will torpedo abortion coverage; or b) he knows full well how insurance works, and intends to torpedo abortion coverage. Since I saw the problem after a one-semester course on insurance law, and since I'm nothing if not really cynical, I'm betting on the latter.

In his words:

Under our amendment, women who receive federal subsidies will be prohibited from using them to pay for insurance policies that cover abortion. The amendment does not prevent private plans from offering abortion services and it does not prohibit women from purchasing abortion coverage with their own money. The amendment specifically states that even those who receive federal subsidies can purchase a supplemental policy with private money to cover abortions.

Some opponents of the amendment have tried to argue that it would effectively end health insurance coverage of abortion in both the private and public sectors. This argument is nothing more than a scare tactic.

These comments reflect a complete lack of understanding of the basic functioning of insurance markets. Insurance works because a large group of people who might incur some significant financial liability offload the risk that they bear onto an insurance company. What they're effectively doing is trading a small chance of incurring a large loss for a 100% chance of incurring a small loss (i.e., the premium). Insurance companies use complex statistical and actuarial methods to calculate a) the number of their policyholders who will probably suffer a loss; and b) how big that loss will be.

The statistical and actuarial models the insurance companies use only work because the average policyholder doesn't know whether he or she will incur a loss. In a pool of policyholders, you'll probably have people who know some information that the insurance company doesn't about the likelihood they'll suffer a loss. This is called information asymmetry. If all of the people in the insurance pool had this kind of information asymmetry, the models would be wrong. An insurance company would charge too little for the actual risk of loss that they carry, and once those losses started to happen, the insurance company would very quickly find itself underwater, because it won't have enough capital to meet its obligations. (Incidentally, insurance companies' capital reserves are so heavily regulated [page 2] to guard against this and other systemic risk problems.) Insurance only works because the average policyholder doesn't know for sure that he will have a loss.

The problem just described is called adverse selection. It's pretty easy to understand -- if you know you're going to take a big hit, and you can pay someone a tiny fraction of that amount in order to have them take care of it, you'd be irrational not to do so. Insurance companies are obviously aware of this natural tendency, so they guard quite carefully against adverse selection. That's why they're so obsessive about the forms that you fill out, especially with respect to pre-existing conditions. They're making sure that you don't insure against a known loss. Of course, they go way overboard with the pre-existing conditions thing, but that's a problem with the profit incentive of publicly-held insurance companies, and that's a post for another day.

Anyway, back to abortion. Stupak says that insurance companies can offer supplemental policies to provide insurance coverage for women who receive federal subsidies and thus couldn't (under his language) buy a policy with insurance coverage. Leaving aside the question how one would determine whether a woman has spent federal money on an insurance policy (since money is fungible, any money you get could arguably be described as allowing you to purchase something else by freeing up your resources), why in the world would an insurance company want to create a pool of policyholders who are all essentially adverse selectors?

Sure, there would be some women who would buy the coverage because they want to be covered just in case (just as there are policyholders now who have no idea that they're going to take a hit, but they want to be covered "just in case"). But this is a policy offering coverage of one very discrete product. It's like offering a separate policy for men who want coverage for their Viagra prescriptions. Sure, there might be some men who say "well, who knows whether I'll ever have ED, but I better buy this coverage just in case." But obviously the vast majority of those who buy such coverage know that they're going to make a claim on it. The same would hold true of abortion.

Coverage of specific health procedures only works in insurance policies that are able to spread the risk over everyone. Otherwise, adverse selection will very quickly act to torpedo an insurance market. I suspect that this is EXACTLY what Stupak wants.

Wednesday, November 19, 2008

The California Supreme Court granted (cert? discretionary review? not sure how the state's system works) review of three lawsuits challenging the gay marriage ban.

I know nothing more about California law than what I've read in conjunction with this issue, but it seems like the lawsuits have a decent legal argument. Essentially, they're arguing that this is not just an amendment to the constitution, but a change in a legal right that the constitution guaranteed. That's a subtle distinction, but an important one: ballot initiatives can accomplish the former, but not the latter.

The problem is this: even if it's a valid and sound legal argument, it will still be looked at as an attempt to thwart the "will of the people." Of course, that's pure crap -- Prop 8 was passed with 51% of the vote, and maybe 50% of the eligible voters voted in the election. So it's the will of a quarter of the people.

That attack is also crap in another way: the courts are supposed to protect vulnerable minorities from majoritarian excesses. If the 25% of the California population that's still bigoted can use a loophole to change the legal status of citizens, that's a problem. And the courts are supposed to prevent that from happening.

Imagine if this were the 1960s, and Prop 8 forbade interracial marriage. Some of the same people who are against gay marriage now were against (and probably still are, though under the radar) interracial marriage.

Of course, it took a court case to put an end to the de jure prohibition against interracial marriage (Loving v. Virginia). It will probably take another court case to end the modern version of that hatred.

The current SCOTUS isn't likely to look favorably on such a case, but luckily for the Prop 8 challenge, it won't get the chance to rule: the Prop 8 lawsuits are purely a matter of state law, and SCOTUS has no jurisdiction there (unless the challenge is that state law violates the federal constitution, but that argument isn't being made).

Sunday, November 16, 2008

Judicial elections are stupid. There, I said it. Though it may be undemocratic (small 'd') to say this, the general public has no idea what makes a qualified judge. A judicial candidate shouldn't be selected on the same criteria as are regular political candidates -- i.e., I'm for family values, I'm against gun control, etc. In fact, not so long ago, it used to be against several canons of judicial ethics for a candidate to announce publicly his position on an issue. This makes sense -- a judge shouldn't be seen by litigants or the public as having staked out a position before considering the facts and law in a given case.

Additionally, retired SCOTUS Justice O'Connor has weighed in. "There is too much special interest money and influence in state court elections," O'Connor said recently. "It endangers the public's faith in the justice system. If courts are going to stay impartial, leaders in every state need to get moving on reforms." (Thanks to AP article cited below for these quotations)

The better way to select state judges is via merit selection: a committee reviews a slate of candidates and recommends one to the governor, who appoints the judge. After a given period, say two years, the judge is up for retention (not re-election: the only effect of the vote is a decision whether the judge stays or gets the boot). If the public is sufficiently incensed about the judge's performance, he's sent packing, whereupon the governor appoints a replacement and the process continues.

This allows the benefits of judicial elections -- a democratic (again, small 'd') check on the power of the judiciary -- without the costs associated with potentially unqualified by well-funded candidates displacing experienced judges.

Institutional memory is an important asset. It takes a few years for a judge to find his groove and to get familiar with the lay of the land. A judge who has a few years under his belt is far more valuable to the bar and to the public than a newbie.

Update: SCOTUS will hear a case dealing with judicial ethics and tangentially involving judicial campaign financing. It seems that a certain West Virginia Supreme Court justice declined to recuse himself from a case in which a $50m verdict against his largest campaign donor was overturned. Really, though, what's $50 million among friends? Read more about the case, Caperton v. Massey, here and here.

When SCOTUS does hear the case, it will be interesting to hear what Justice Scalia has to say about it; you'll recall that in 2004, he faced quite a bit of criticism when he failed to recuse himself from a case in which VPOTUS Cheney's energy policy was the issue. A few weeks before argument (might have the timing wrong; it might have been months), he went duck hunting and fishing with Cheney at a private hunting camp. Sure, he didn't share the same duck blind with Cheney, but what about the fishing boat?

Oh, by the way, speaking of Scalia, this just in: it seems he spent this past weekend hunting with the author of an amicus brief in the huge Pharma case, Wyeth v. Levine(summary here), which was argued today.Um, wow. That's about all that can be said.

And another update: NYT has this article about some of the late Chief Justice Rehnquist's papers. Interesting stuff; the reason I include it in this post is because of the discussion on judicial ethics and recusal. Rehnquist faced stiff criticism for failing to recuse from a case early in his tenure as Associate Justice, then seemingly reversed course and recused himself from the consideration of US v. Nixon (yes, that one).

Friday, November 14, 2008

An interesting case from Utah. Pleasant Grove City has a park it says is dedicated to its "pioneer heritage." To celebrate that heritage, it has a number of privately-donated monuments. There's a log cabin, a Mormon religious artifact, a monument to firefighters who died on Sept. 11 (an Eagle Scout's public service project -- not sure how that's related to pioneer heritage, but whatever), and a monument to the Ten Commandments.

A weird (no really, it's weird) religious group called Summum wanted to put its own monument up in the park, right next to the 10 Commandments monument. Summum believes that before Moses came down the mountain with the Commandments, he received Seven Aphorisms from God. Apparently the Israelites weren't ready, so he hid the Aphorisms away and went to get the Commandments. But the Aphorisms have been passed down through history, and now they've appeared in Utah.

Anyway, the city, predictably, said "thanks, but no thanks" to that monument. Summum sued, and eventually won at the Court of Appeals. The city petitioned the Court for certiorari, and got it.

Oral arguments were a couple of days ago. You can read about them here and here.

The case boils down to this: if the Eagles monument and the Summum monument are private speech, then the city is engaging in viewpoint discrimination. If the city has “adopted” the monuments in the park, then the monuments are government speech — and government can say nearly whatever it wants. The problem with that is that what it’s saying here is “we think the 10 commandments are better than the seven aphorisms.” That constitutes an official statement of preference for one religion over another. That’s an establishment clause violation. There wasn’t an establishment question before the Court, but there was an establishment issue in earlier proceedings (it just wasn’t appealed). Procedurally it’s complicated, but I think the case will (should) get remanded for additional factfinding on the question whether the government speech (if that’s what it is) is itself a violation of the establishment clause.